WINS: Riding the Wave of the Offshore Upcycle

Vektor Research

7/2/20242 min read

WINS: Riding the Wave of the Offshore Upcycle

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PT Wintermar Offshore Marine Tbk ($WINS) is an Indonesian offshore supply vessel (“OSV”) company. Shares have rallied nearly eightfold from their all-time low of Rp60 per share in 2020. But they are still trading 68% below their all-time high. Additional considerations that make WINS attractive:

1. A relatively misunderstood sector

2. Few sell-side coverage, possibly given its liquidity and market cap

Our bull thesis for WINS is as follows:

1. Multi-year Offshore Upcycle Will Sustain Demand for OSVs

Demand for OSVs is largely dependent on offshore investment, which will be driven by 1) robust oil prices as a result of OPEC+ extended production cuts, growing demand from the petrochemical sector, and EV hiccup, 2) peaking US shale production, and 3) reduced offshore breakeven levels.

The Permian Basin, a lion’s share of US oil production growth source, is showing signs of peaking. Consequently, oil companies have been increasingly seeking offshore projects, whose breakeven levels are comparable to, or even lower than, breakeven levels of shale oil. We believe these factors will sustain demand for OSVs.

2. Supply Constraints Will Drive Dayrates and Utilization Rates

Global OSV owners, including WINS, are experiencing dayrates and utilization rates at elevated levels. This was caused by supply constraints in the OSV market, as shipyard capacity has massively declined following the Global Financial Crisis in 2008 and high newbuilding and secondhand prices, thus leading to an ageing global fleet. With nearly no supply coming to the market, we believe the OSV market will remain undersupplied for at least the next two to three years.

3. Corporate Actions Could Drive the Stock Price

WINS have conducted private placements, reduced its debt, and replaced its low-tier vessels with mid-to-high-tier vessels since the previous downcycle in 2014. For our base case assumptions, we conservatively anticipate average high-tier and mid-tier dayrates to increase to $13,900/$15,000 and $4,200/$4,600 per day in 2024F and 2025F, respectively. This reflects an 11% revenue and 24% EBITDA annual growth in the next two years. Dayrates will be driven by 1) robust demand and supply constraints and 2) long-term contracts below market rates for two PSVs that have rolled off, and those PSVs will operate under higher market rates. Amid the robust market environment, WINS could purchase vessels, distribute dividends, or repurchase shares, which could drive the stock price.


The stock is trading at 6.2x/5.1x forward 24F/25F EV/EBITDA. The stock was trading at 4-5x EV/EBITDA during the 2014 oil price crash and COVID years. Shares were trading at 9-9.5x during the previous upcycle. If we conservatively assume that the stock will trade at 6-7x EV/EBITDA, our fair value estimates are between Rp574/share and Rp689/share (22%-47%) by 2025F. The stock offers an asymmetric risk/reward opportunity, as our estimated upside potential ranges from -33% (bear case, 4x EV/EBITDA) to 90% (bull case, 8x EV/EBITDA).

Investment Risks

Investment risks include the proliferation of electric vehicles that will lower oil demand, the potential increase in supply resulting from the reactivation of cold-stacked vessels, and exchange rate fluctuations.


This report is not an investment recommendation; hence we do not provide any BUY/HOLD/SELL call on the stock. Please conduct your own due diligence. Our opinions and projections could be inaccurate, and we are not liable for the inaccuracies in secondary data or third-party research. We neither receive compensation from nor have business relationships with any of the companies mentioned in the report.

Image source: image by wasi1370 from Pixabay